Taking Financial Planning out of the Dark Ages with Advizr

by Hussain Zaidi, on June 6, 2017

Improving Financial Planning

“People pretend not to like grapes when the vines are too high for them to reach.”
― Marguerite de Navarre, French author, 1492-1549

Our industry has a problem.

Everyone talks about increased fiduciary responsibility and wanting to provide holistic advice, but few advisors are doing anything about it.  The best way to deliver on these promises is to prepare a full financial plan for every client.  But according to Cerulli, two thirds of clients who work with a financial advisor do not receive a full financial plan1.

Why are so few financial plans being created? Because preparing a full plan takes way too long! Financial planning expert Michael Kitces estimates that it requires 20 hours of hands-on work for an advisor to produce a single financial plan.

For smaller practices, this creates a serious scalability problem. The average advisor has 156 clients and adds around eight new clients annually2. (Although they also lose around the same number of clients annually, so their overall client base is not growing.  This is a related problem.) Creating those eight new financial plans require 160 hours of an advisor’s time.  That’s a full month of working eight hours a day, five days a week.

Advisors who are spending this much time on planning are neglecting other parts of their practice, such as new business development and client servicing. (Now you know how the problems are related.)

Even when a plan is created, the client’s user experience is lackluster, at best. The process requires hours of homework, stress-inducing meetings and days of waiting between steps. The result is that few clients make it through the entire process and those that do get a static snapshot that’s out of date from the moment it is delivered.

We thought that something should be done about this. The industry needed a tool that would allow financial advisors to provide 100% of their clients with customized financial plans. A tool that would engage clients at every step and cut through the complexity and time-consuming data entry to enable advisors to generate plans quickly and serve more clients.

This is how Advizr was born.

When we launched Advizr in 2013, we were laser-focused on designing a tool that was accessible to a much wider audience of advisors than the products currently on the market.  We wanted it to be easy to use without compromising on providing a sophisticated, cashflow-based financial planning tool.

There were two target markets we believed were underserved: 1) advisors who were not doing any planning at all; and 2) advisors who were doing some financial planning, but were ready to take it to the next level.  We felt these groups could benefit the most from our efforts to streamline what had become a convoluted process.

Goal #1: Make financial planning more collaborative

We felt strongly that financial planning should be a collaborative effort. Collaboration should be enabled from the very beginning of the planning process. Beginning with the discovery process, we facilitate a collaborative discussion through our data collection wizard, making the whole process more efficient as both can fill in the gaps in real time. Another process we significantly improved was the collaboration around scenario planning.  For this, we designed an intuitive interface that would allow the advisor and client to quickly and collaboratively understand the trade-offs for different financial decisions. This turns the one-sided plan presentation into a two-way discussion that is both dynamic and cooperative.

Planning has always been relegated to a back-office function at most firms. But the relationship between the advisor and client exists in the front-office, as opportunities to grow a more profitable, sustainable practice.  By developing a tool that encouraged interaction between advisor and client we relocated planning to the front-office where it can better support business development.

Moving planning out of the back-office shadows and into the front-office daylight was only our first goal.

Goal #2: Revamp the user experience

We knew that the solution to the problem of complexity would require a completely different planning workflow. One that minimized the busywork and interrogation and focused on bringing the advisor and the client together. Advisors were already at the heart of the client’s financial affairs. Could we design a platform that maximized client’s existing knowledge?

Our team analyzed each step of building a plan and focused first on minimizing manual data entry. We set out to build integrations with popular advisor CRM’s, custodians, portfolio managers and data aggregators to automatically import as much information as possible for each client. This enabled Advizr plans to be partially completed as soon as the start button was clicked.

Financial plans can be presented on a big screen in a conference room or on a tablet, putting the advisor and the client side by side as they refine the strategy. Adding fully customizable reports mean that the output of the planning session is more relevant and meaningful for each client.

Advizr’s versatile technology now allows for a truly unified approach to financial planning.

Goal #3: “Turbo-Tax” the complex planning process

Every client is different and no two financial plans are exactly the same. So we provided advisors with a blueprint that allowed for considerable depth and specialization, without overwhelming the client.  Using tax software as inspiration, we decided our third goal should be to “Turbo-tax” the complex planning process.

We realized we could make this happen by building an intuitive data collection wizard. We improved the design by using a more conversational flow, which removed a lot of the guesswork. Our data collection process is so intuitive that you can feel confident asking your clients to complete parts of it on their own.

During the design process, we solicited feedback from many advisors who shared their frustrations with their current planning process. Many agreed it was common for clients to run into a roadblock after they began submitting their financial data. They would become discouraged if they found a question they did not understand or were asked for a document they could not locate. Advizr’s interactive workflow helps advisors immediately identify when a client is having difficulty, so they can get them back on track.

Taking financial planning out of the Dark Ages

It is time for financial advisors and planners to utilize a platform that will support and maximize their greatest value proposition: the ability to create financial plans in a way that is collaborative, intuitive and flexible. The platform has to offer more than a simple face-lift of the status quo. From workflows to live scenario testing, a platform like Advizr enables the delivery of a planning experience that is grounded in shared values and the power of working together.

Recognizing that the market is moving towards holistic advice, we were determined to deliver it in a cost-effective way. Our innovative software allows advisors to complete more financial plans while creating deeper engagement with their clients. This makes the financial planning process both scalable and client-centric.

We believe that the right financial plan has the power to strengthen the connection between advisor and client, create a foundation for achieving their goals, and help clients live a life of financial integrity.

1 Cerulli Associates and College for Financial Planning, 2009 Survey of Trends in the Financial Planning Industry
2 Pricemetrix, 2013

- Hussain Zaidi

Topics:Industry Notes

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